Here’s how much passive income £10,000 worth of Legal & General shares could deliver in 2026
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Legal & General (LSE: LGEN) shares are a very popular passive income investment in the UK. That’s because, for years now, they’ve consistently offered some of the highest dividend yields in the FTSE 100 index.
Interested to see how much income the shares could deliver in 2026? Let’s take a look at the dividend forecast and crunch the numbers.
A passive income machine
In 2025, Legal & General paid its investors two dividends. On 5 June, they received 15.36p per share (the final dividend for the 2024 financial year) and then on 26 September they received another 6.12p per share (the interim dividend for the 2025 financial year).
Recently, the financial services company has said that it’s aiming to lift its payout by 2% per year in the medium term. So, let’s take the total of those payouts (21.48p) and increase it by 2%.
We get 21.9p per share. So, that’s how much income shareholders could be looking at for the 2026 calendar year.
As for how much that translates to on a £10,000 investment, that will depend on the share price at the time the shares were/are bought (and trading commissions).
But let’s say that the share price is £2.55 when the shares are purchased by a new investor and ignore trading commissions for now. At that price, the investor would get 3,921 shares.
Multiply 3,921 by 21.9p per share and we get £859. That’s how much passive income the individual could be looking at for 2026.
What’s the catch?
Obviously, that kind of income from a £10,000 investment sounds quite attractive. So, what are the risks?
Well, for a start, dividends are never guaranteed. Companies can reduce or cancel them at any time.
Looking at Legal & General, I actually wouldn’t be surprised if the company was to reduce its payout in the years ahead. That’s because right now, the dividends being paid out are more than its earnings so the dividend coverage ratio is very low.
Second, there’s share price risk in both the short term and the long term.
In the short term, the price could be volatile if there’s turbulence in the financial markets and investors start worrying about the value of the assets on the insurer’s books. In the long term, the price could underperform the broader market leading to sub-optimal returns (note that over the last 10 years the share price has actually gone backwards while major indexes like the FTSE 100 and the S&P 500 have soared).
Of course, operational performance is also a risk. For example, lower-than-expected operating profit due to weak performance in one of the company’s divisions could lead to disappointing returns.
Are there better opportunities?
Are the potential rewards worth the risk? Probably – I think the shares are worth considering as part of a diversified income portfolio.
But given the low dividend coverage ratio, and the underwhelming long-term share price track record here, I do think there are better shares to consider buying for income today. Taking a five-year view, I reckon other shares will provide higher returns.
